A friend's wife received a lump sum payment in 2008 when made redundant which included statutory plus a small ex-gratia payment of €4000 plus €4500 pay in lieu of notice (PILON was taxed, ex-gratia payment was not).
The employer has agreed now to pay a further amount to avoid legal proceedings. They had paid her less redundancy than others and she was going to take a discrimination case against them but they wish to settle now. Is she deemed to have used her entitlement to the basic exemption on the ex-gratia payment received (she can claim back the tax on the PILON too) or can she ask the company to pay the increased amount on an amended RP50 for 2008 even though they are paying it now?
Tax wise she would have been better to receive the money at the time of redundancy in 2008 as most of it would have been covered against tax by the basic plus increased exemption etc. She is concerned that she cannot claim the increased exemption etc now as this may be treated as a subsequent claim against the same employer and therefore ineligible for any tax relief. Is she correct that it is a subsequent payment or is it deemed part of the redundancy paid in 2008? If she asks the employer to backdate it as a 2008 payment, will the tax office accept this?
The employer has agreed now to pay a further amount to avoid legal proceedings. They had paid her less redundancy than others and she was going to take a discrimination case against them but they wish to settle now. Is she deemed to have used her entitlement to the basic exemption on the ex-gratia payment received (she can claim back the tax on the PILON too) or can she ask the company to pay the increased amount on an amended RP50 for 2008 even though they are paying it now?
Tax wise she would have been better to receive the money at the time of redundancy in 2008 as most of it would have been covered against tax by the basic plus increased exemption etc. She is concerned that she cannot claim the increased exemption etc now as this may be treated as a subsequent claim against the same employer and therefore ineligible for any tax relief. Is she correct that it is a subsequent payment or is it deemed part of the redundancy paid in 2008? If she asks the employer to backdate it as a 2008 payment, will the tax office accept this?